In recent times, the term "cross-border expansion" has emerged as a buzzword within the home furnishings industry, indicating a significant shift in business strategiesParticularly, markets in India and Southeast Asia are being recognized as promising frontiers for enterprises seeking to broaden their overseas operationsThe potential of these markets and the opportunities they present have garnered considerable optimism amongst stakeholders.

As reported by industry sources, a number of prominent domestic home furnishing brands are gearing up for international competition, with plans to establish a footprint in foreign markets around the Chinese New Year in 2024. Notably, companies like Shangpin Home Collection are actively unveiling new showrooms in the Philippines and Myanmar, while setting their sights on expanding further into Vietnam, Malaysia, and Saudi ArabiaSimultaneously, brands such as Zuo You Home and Sophia are also diving into international waters, announcing the establishment of their own branded stores, specifically targeting the mid to high-end segments in India and Southeast Asia.

It's not just individual companies that stand to benefit from this trend; the entire home furnishings industry is experiencing a positive ripple effect

Data from the Customs Administration reveals a remarkable 20.4% year-on-year increase in furniture exports for the first four months of 2024, hitting a record high with a total of 168.5 billion yuanExports in April alone saw a month-on-month growth of 12.6%, showcasing an impressive performance amid rigorous market conditions.

Strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, Zhan Junhao, provided insights in a recent interview, highlighting the multifaceted benefits of overseas expansion for home furnishing companiesAccording to Zhan, such endeavors instigate a greater focus on research and development, design, and brand establishment, ultimately pushing for industrial upgrades and a shift towards high-quality development within the broader sector.

He went on to explain that increased interaction with international markets fosters opportunities for communication and cooperation, aiding in technology acquisition and market experience exchange

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Furthermore, enterprises that find success abroad often return with valuable insights that can invigorate the domestic market, enhancing competitiveness across the industryLastly, the international ventures of these home furnishing companies will catalyze the globalization of upstream and downstream industries including raw materials, logistics, and design.

The prevailing belief encapsulated in the phrase, "No overseas expansion, no future," reflects the consensus among many manufacturers in the industryFor over three decades, the home furnishings sector has basked in the prosperity brought about by real estate developmentsHowever, the slow recovery of the domestic construction industry in recent years has strained performance, prompting a pivot towards overseas ventures as a vital growth avenue for many home furnishing firms.

Shangpin Home Collection stands as a prime example of this paradigm shift

A representative divulged that the company’s current international strategy revolves around the export of its industrial model rather than merely its products.

“Traditional export methods only involved selling products overseas, whereas the industrial model output encompasses the entire supply chain, including design, manufacturing, sales, and after-sales service,” the representative clarified“We aim to adopt multiple collaborative models—franchising, project cooperation, and technology transfer—to propel our overseas operations.”

Reports indicate that Shangpin Home Collection’s technology transfer model has already been successfully implemented in several countriesBy partnering with local leading enterprises, the company has introduced comprehensive home customization services to locales such as Thailand, Indonesia, India, the USA, Singapore, the Philippines, Myanmar, and Zimbabwe

Additionally, Shangpin’s franchise operations have flourished in Brunei and Sydney for several yearsFrom January to May this year alone, the company has unveiled new showrooms in Vietnam, the Philippines, and Myanmar, with plans for further expansion into Malaysia and Saudi Arabia set for openings in June and August, respectively.

Meanwhile, Sophia is advancing its overseas market layout through a variety of avenues, including premium retail, engineering projects, and distributor partnershipsOn January 12, Sophia inaugurated a high-end customized experience center in Ho Chi Minh City, Vietnam, positioning it as a pivotal showcase for its brand and product prowess, hence facilitating its global brand expansionCurrently, Sophia boasts 27 overseas distributors that span over 20 countries, including the United States, Canada, Australia, Singapore, Vietnam, and Thailand, collaborating with top developers and contractors to deliver comprehensive customization solutions to clients in more than 30 countries and regions around the globe.

According to a Sophia spokesperson, “In recent years, we’ve been actively strategizing our overseas expansion, forging close partnerships with international distributors, top developers, and contractors

Through these alliances, we’ve successfully introduced high-quality products into the global marketMoving forward, we intend to deepen our collaborations and explore even broader international market opportunities.”

In addition to its international efforts, Zuo You Home is steadfastly advancing digital transformation while developing a comprehensive home furnishing customization strategy to support its overseas brandingSo far, the company has established brand stores across Asia, Europe, and North America, focusing on upgrading its hardware infrastructureTheir new soft sofa production line is now operational, alongside the promotion of smart production lines aimed at elevating the company towards high-end, green, and intelligent production methodologies.

Following a similar trajectory, Haolaike has aggressively accelerated its global strategies since last year, expanding its overseas presence to encompass nine cities across seven countries, including Malaysia, Singapore, Oman, Dubai, Canada, Panama, and Australia

This expansion is aimed at offering global consumers a diverse and personalized lifestyle selection.

The quest for an overseas growth trajectory is not merely driven by an appetite for international presence; it's equally a response to challenging domestic market conditionsOver the years, the boom in the real estate market has propelled the home furnishings industry to new heightsHowever, recent years have seen the real estate sector undergo deep adjustments, adversely affecting the home furnishings industry as a downstream sectorAccording to data from the National Bureau of Statistics, the retail sales of furniture hit 12.3 billion yuan in May, reflecting a 4.8% increase year-on-year—the growth, while existent, showcases a significant deceleration.

Conversely, international markets continue to present substantial opportunitiesAccording to the "2024 Global Furniture Market Insights Report," revenues in the global furniture market are projected to reach a staggering $766.2 billion by 2024.

“The global market is gradually regaining momentum, coupled with an increasing demand for home products, presenting new opportunities for enterprises

Simultaneously, the adjustments within the domestic real estate sector are compelling furniture companies to seek export avenues abroadAdditionally, governmental support for businesses to ‘go global’ has played a significant role in fuelling enthusiasm and motivation within furniture enterprises to expand internationally,” shared a representative from Shangpin Home Collection.

From financial reports, it’s evident that several home furnishing firms have made notable strides in their international pursuitsIn 2023, Shangpin Home Collection reported overseas channel revenues of approximately 12.1 million yuan, marking a 22.78% increase year-on-yearSophia reported export revenues of about 50.1 million yuan, reflecting a remarkable growth of 42.92% over the previous year.

Nevertheless, the journey of cross-border expansion is not devoid of challengesZhan Junhao emphasized that fluctuations in the global trading environment, including tariff policies and geopolitical dynamics, could significantly impact the overseas operations of home furnishing companies.

He advised businesses to align their overseas market choices with their brand values and product attributes while ensuring a clear differentiation strategy that avoids direct competition with established local brands

Understanding local cultures and consumer preferences is essential for crafting localized strategies tailored to product design and marketing effortsIn terms of supply chain management, optimizing the supply chain is crucial for maintaining consistent product quality and service while considering cost-effectiveness and responsiveness to the dynamic demands of foreign marketsOn a platform level, leveraging digital marketing tools and cross-border e-commerce platforms can help companies precisely reach target consumers and enhance brand visibility and market shareFurthermore, narrating brand stories and articulating brand values can forge emotional connections and enhance international recognition and loyalty.

Chiming in, Liang Zhenpeng, a seasoned industrial economic observer, also recommended that home furnishing companies tailor their brand positioning and offerings to suit the tastes of target markets based on local demands and consumer behavior